Payment Reform in a Changing Healthcare Reform Mohamad Bydon, M.D. Staff Neurosurgical Consultant Mayo Clinic Department of Neurologic Surgery Mayo Clinic College of Medicine & Science Associate Professor of Neurologic Surgery; Orthopedic Surgery; Health Services Research NeuroSafe 2018 August 2-3, 2018 Minneapolis, MN 2018 MFMER slide-1
Disclosures None 2018 MFMER slide-2
Acknowledgements University of Minnesota Drs. Matthew Hunt and Daniel Guillaume Ms. Carolyn Vinup 2018 MFMER slide-3
Introduction Annual healthcare spending in US: 3.3$ trillion ($10,348/person) %GDP spent on Healthcare in US: 17% - More than any country https://data.worldbank.org/indicator/sh.xpd.totl.zs https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf 2018 MFMER slide-4
Stairway to Healthcare Inflation Source:http://californiaacep.org/wp-content/uploads/PDF-HealthCareCosts12.pdf 2018 MFMER slide-5
Healthcare Expenditure Global Trends 2018 MFMER slide-6
A look back at where we started from 2018 MFMER slide-7
First Employee Based Insurance Employer programs Mining Lumber Railroads Compensation to individuals only if they suffered an injury at work. http://discovermagazine.com/~/media/images/issu es/2016/julaug/dsc-hl0816_01.jpg https://www.emaxhealth.com/1275/72/33689/look-history-health-insurance-america.html 2018 MFMER slide-8
Blue Shields Physician coverage Developed lumber and mining camps of the Pacific Northwest to provide medical care Paying monthly fees to medical service bureaus composed of groups of physicians 1939: First official Blue shields plan was founded in California "Health Care Service Corporation (HCSC) Who We Are". www.hcsc.com. Retrieved 2017-01-06. Marc Lichtenstein (n.d.). "Health Insurance From Invention to Innovation: A History of the Blue Cross and Blue Shield Companies". Blue Cross and Blue Shield Association. https://slaseo.com/images/1950s-advertisement.jpg_tmp.jpg 2018 MFMER slide-9
Advent of Blue Cross Hospital Coverage 1929: Group hospital insurance plan was offered to teachers at Baylor s healthcare facilities in Dallas, Texas In order to placate the AMA, Blue Cross offered only hospital insurance in order to avoid infringement of physicians incomes Justin Ford Kimball from the Handbook of TexasOnline. Retrieved August 31, 2009. [dead link] 2018 MFMER slide-10
Proliferation of Employee based Plans Post WW2 Wage and price controls instituted during the war. In reaction to the wage controls, many labor groups planned to go on strike en-masse. In order to avert the strike, in a concession to the labor groups, the War Labor Board exempted employer-paid health benefits from wage controls and income tax. Employers received a 100% tax deduction while the benefits employees received were exempt from federal, state, and city taxation. http://customers.hbci.com/~wenonah/history/img/flexner.jpg https://images-na.ssl-images-amazon.com/images/i/71wxmp%2bfk7l.jpg https://www.peoplekeep.com/resources/employer-sponsored-healthinsurance? hstc=69472015.00b588860bf94ec64e995ac2e341ed7f.1524194384594.1524194384594.1524194384594.1& hssc= 69472015.1.1524194384594& hsfp=1621823765 2018 MFMER slide-11
Social Security Amendments of 1965- Medicare and Medicaid Nearly 60% of the population had hospital insurance. Disability insurance was attached to Social Security. In the 1960, President Johnson signed Medicare and Medicaid into law, which protects the elderly, disabled, and indigent. 2018 MFMER slide-12
Blue Cross &Blue shield 1960s: US government chooses to partner with Blue Cross and Blue Shield companies to administer Medicare 1982, Blue Shield merged with The Blue Cross Association to form the Blue Cross and Blue Shield Association (BCBS) https://s3.amazonaws.com/fjds/company/original/448/bcbs-coverage-for- LINX.jpg?1491945827 Marc Lichtenstein (n.d.). "Health Insurance From Invention to Innovation: A History of the Blue Cross and Blue Shield Companies". Blue Cross and Blue Shield Association 2018 MFMER slide-13
Affordable care Act (ACA) 2010 The 2010 ACA Mandated individuals to purchase health insurance by 2014. Despite these efforts, health insurance coverage continues to be an issue for the United States. https://benefitsattorney.com/wp-content/uploads/affordable-care-act-logo1.jpg 2018 MFMER slide-14
Effect on individual insurance market pre existing conditions https://www.healthinsurance.org/assets/2016/07/individual-market-premiumsdropped.jpg 2018 MFMER slide-15
Effect of ACA on Medicaid https://obamacarefacts.com/wp-content/uploads/2015/02/healthcare-spending-aca-cbo-chart.png 2018 MFMER slide-16
Sources of insurance in US Trillions in Spending https://aspe.hhs.gov/system/files/images-reports-basic/70441/fig1.jpg 2018 MFMER slide-17
Who will pay? Government Patients Providers Fee for service? Source: http://www.floridatrend.com/article/4048/payments-wedo-need-change 2018 MFMER slide-18
Bundled Payments Source: http://bundledhealthcare.weebly.com/research.html 2018 MFMER slide-19
Example of Bundled Payments Source: https://www.linkedin.com/pulse/5-emerging-trends-medtech-sales-reps-should-watch-tom-williams 2018 MFMER slide-20
Complex Patients Extensive Workup Longer LOS Higher Readmissions Heal the Sick Treat the Healthy Source: https://txhca.org/june-alternative-payment-models-managed-care 2018 MFMER slide-21
Bundled Payments & ACOs Providers Bear Financial Responsibility Source: http://www.beckershospitalreview.com/hospital-physician-relationships/evaluating-the-medicare-pilotprograms-comparing-acos-and-bundled-payments.html 2018 MFMER slide-22
Fee for Service RIP 2018 MFMER slide-23
As Payer Savings Increase Provider Risk Increases *Source: http://www.slideshare.net/the_knowledge_group/bundled-payments-in-healthcare-the-next-generation-live-webcast 2018 MFMER slide-24
Experience with Bundled Payments 1991 Bundled Payment Demonstration for CABG (7 hospitals, 5 years) 2009 Physician & Hospital Collaboration Demo (12 NJ hospitals, 3 years) 2009 Acute Care Episode Demo (5 hospitals, 3 years) 2013 Bundled Payment for Care Improvement (multiple hospitals & other providers, 3 years) 2018 MFMER slide-25
Results from BPCI Models BPCI Participants Baseline Payments $30,551 Model Payments $27,265 Decrease $3,286 BPCI Savings $1,167 Comparison Hospitals Baseline Payments $30,057 Model Period Payments $27,938 Decrease $2,119 JAMA.2016;316(12):1267-1278 September 27, 2016 2018 MFMER slide-26
MACRA: Medicare Access & CHIP Reauthorization Act The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) ended the Sustainable Growth Rate formula, which threatened clinicians participating in Medicare with potential payment cliffs for 13 years. MACRA Proposal laid out the groundwork for dissolving PQRS, the Value-Based Payment Modifier (VBPM) and Meaningful Use (MU) and assimilating them into one program. Department of Neurologic Surgery 2018 MFMER slide-27
MACRA: Continued 2 Payment Pathways: 1. Merit based Incentive Payment System (MIPS): 4 factors Physician Quality Reporting System: No participation = automatic 4 percent -ve payment adjustment Submitting minimum amount of data (1 Quality measure) = Neutral payment Submitting 90 days of data = Small +ve payment Submitting full year of data = Moderate +ve payment adjustment Value Based Modifier (as before) EHR Meaningful Use (as before) Clinical Practice Improvement Activities Department of Neurologic Surgery 2018 MFMER slide-28
2. Alternative Payment Models (APMs) Payment incorporates use of quality metrics, EHR, and provider upside and downside risk Advanced APMs for 2017: Comprehensive End-stage Renal Disease (ESRD) Care Model (Large Dialysis Organizations or LDO and non-ldo two-sided risk arrangements) Comprehensive Primary Care Plus Model Medicare Shared Savings Program Tracks 2 and 3 Next Generation ACO Model Department of Neurologic Surgery 2018 MFMER slide-29
CMS payments overall 2018 MFMER slide-30
Annual Per Capita Healthcare Expenditure By Age Source:http://blogs-images.forbes.com/danmunro/files/2014/04/hccostsbyage.png 2018 MFMER slide-31
The Real Cost of Old Insurance https://www.theatlantic.com/business/archive/2012/01/5-of-americans-made-up-50-of-us-health-care-spending/251402/ https://meps.ahrq.gov/data_files/publications/st455/stat455.pdf http://thehill.com/policy/healthcare/241491-5-percent-of-medicaid-patients-account-for-50-percent-of-costs 2018 MFMER slide-32
https://www.forbes.com/sites/quora/2018/02/16/amazon-berkshire-hathaway-and-jp-morgan-are-forming-a-healthcare-mega-company/#29cd7bf25448 http://news.emory.edu/stories/2018/04/emory_walmart_acp https://www.businesswire.com/news/home/20180130005676/en/amazon-berkshire-hathaway-jpmorgan-chase-partner-u.s. 2018 MFMER slide-33
https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html http://www.healthcareitnews.com/news/doj-wants-more-information-69-billion-cvs-health-and-aetna-merger 2018 MFMER slide-34
Role of Physicians, National Societies Physicians help people every day Collect data, registry format Use that data to identify the 5% Ensure that we do not abandon these 5% They are our sickest patients They are the reason we became doctors Identify ways to achieve cost savings Cost effective healthcare delivery 2018 MFMER slide-35
https://www.cbsnews.com/news/surgery-centers-report-highlights-risks/ https://www.isass.org/public-policy/cms-releases-2017-final-hospital-outpatient-and-asc-rule/ https://www.reuters.com/article/us-health-spine-surgery/spine-surgery-may-be-safer-at-hospitals-than-outpatient-facilities-iduskbn1el1lv 2018 MFMER slide-36
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Conclusions Surgeons should be aware of newer reimbursement models Participate in a qualified clinical data registry Engage in quality improvement activities Take control of the delivery of value based health care Advocate for our patients Push back against unreasonable cost reductions armed with data! 2018 MFMER slide-38
Other References History of the U.S. Healthcare System http://samples.jbpub.com/9781284043761/chapter1.pdf Jahiel, R. I. 1998a. Health Care System of the United States and Its Priorities: History and Implications for Other Countries. Croatian Medical Journal 39 (3): 316 31. 998b. Health Care System of the United States and Its Priorities: History and Implications for Other Countries. Croatian Medical Journal 39 (3): 316 31. Ridic, Goran, Suzanne Gleason, and Ognjen Ridic. 2012. Comparisons of Health Care Systems in the United States, Germany and Canada. Materia Socio-Medica 24 (2): 112 20. 2018 MFMER slide-39
Thank you 2018 MFMER slide-40